PulteGroup, an Atlanta-based homebuilder, is laying off and furloughing an unspecified number of employees as it seeks to cut expenses by $100 million.
Business for Pulte, the nation's third-largest builder, is down significantly, Ryan Marshall, the company president and chief executive, said in a statement.
Last month wasn’t as bad as the month before, but orders “were still down approximately 50% from the prior year,” he said.
The company’s cuts have included “a combination of layoffs, furloughs and other cost-cutting initiatives,” said Marshall, who offered no additional details.
Pulte last year had $9.9 billion in revenues and pre-tax income of $1.3 billion while closing on 23,232 homes, according to the company. At the end of 2019, the company had 5,245 employees.
As the coronavirus shutdowns crashed much of the consumer economy in March, orders for new homes likewise have plunged.
Current homeowners account for a substantial share of the market for new homes as they "move up" or look for second homes. But many of them are struggling. At the start of April, 25% of homeowners did not make their current mortgage payment, according to a survey by Apartment List, a source of housing listings, data and analysis. More than 30% of homeowners at the start of May did not make their monthly payment, the survey concluded.
Still, not all the news is bad. Some homebuyers have begun to flow back into the market, Marshall said.
New net orders went from about 140 homes a week in the last week of March to nearly 400 homes at the end of April, he said. “After an initial significant contraction in housing demand, recent sales trends have been more encouraging.”
Pulte's top executives and members of its board of directors have agreed to temporarily take pay cuts, according to the company. The money they will forgo will be directed to Pulte's employee assistance fund, and some of that help will be available to any workers furloughed or released as part of the cost cutting.
The company will take a $10 million charge in the current quarter as the result of “severance and related expenses,” according to a statement.
